Most Illinois farmland is not owned by farmers
chicagotribune.com
chicagotribune.com
Farming is a terrible business. My few hundred acres (maybe worth $5M) will only churn out a few hundred grand in profit -- not even better than holding t-bills. The margins get better as you get bigger but still not great.
Many of the buyers keep growing their farms because it's a status symbol. Everybody in your area will instantly know you're a big wig if you're one of the X family who has 2,000 acres all without the ick that comes with running other businesses. You can't buy that kind of status in my community with anything other than land.
> Note: The 12 selected counties had some of the highest cash rents in the state. For the purposes of this analysis, a business entity was defined as an organization with an LLC, Inc, LTD, Co, Corp, LP or LLP tag. This land is not necessarily owned by large conglomerates and investment firms. Corporate structures are also attractive vehicles for family businesses.
Edit: apparently not that buried...
> These acres are not necessarily owned by large conglomerates and investment firms. Corporate structures are also attractive vehicles for family businesses because they offer tax benefits and externalize losses.
I don't trust LLMs, even to summarize for me. I have to fact-check every single statement. For instance, if I ask ChatGPT, "Is PLA more dense than ABS?" it answers, "No, PLA is not more dense than ABS." Those are direct quotes. In the third paragraph, ChatGPT says, "So technically, PLA is denser than ABS, not less — I misspoke earlier."
I find LLMs good for using words that I didn't think of. I can then reword a search to get better search results.
To be fair, the cherry-picked example I used above sounds a lot like a human. Humans make such mistakes and corrections. If a human had given me that response, I would shrug and ask more questions. But it would make that human not be my go to source.
It makes me shudder to think about code that is written in such a manner.
Often it has the property which was good enough for generations of C and C++ programmers, it compiles. Does it work? Eh. Do the tests, if there even are tests, check anything useful? Eh.
The focus on "it doesn't matter so long as it compiles" justifies everything up to IFNDR†, the explicit choice in C++ that if what you've written is nonsense but it would not be easy to modify the compiler to notice, just don't worry about it and say it's somebody else's problem.
† "Ill-formed, No Diagnostic Required" these words or near equivalent occur frequently in the ISO definition of the language.
Mistakes happen. If they are honest mistakes, then we can deal with it. If they are deliberate mistakes, well, we can deal with that too but in a different manner. The problem that I have is answering something in a confident manner when it's really a hedge to not sound unsure. People apparently have issues with an unsure bot. I'd much rather have a response like, "I'm not positive, but I think PLA is less dense than ABS" for the wiggle room of being able to come back later with "So technically, PLA is more dense than ABS". Even if the bot doesn't figure it out, by phrasing that way, you're clued in on what to fact check
It also makes me shudder to think of people who know just enough to compile and fix glaring mistakes, but largely trust the overall AI output. As if commercial software quality hasn't gone downhill enough these days.
Non-judgmental curious question: why do you keep doing it? (As opposed to selling the land and buying tbills.)
Also non-judgmental curious question: what is this "ick" related to non-farming businesses?
I don't know how to exactly describe it, but I'd suggest it has to do with more autonomy in non-farming businesses, where you are always trying to balance between trying to make the business work and not taking advantage of people. Or if you end up taking advantage of people...
In farming, it is all laid out for you. Prices are already set in Chicago. The buyer is always there. You grow the product, deliver it, and that's that. These days, with the way technology has gone, you might not even interact with another person in the process.
What about all the non-organic farming, use of pesticides/antibiotics/etc., poor treatment of animals (sometimes), water waste in some cases (like almonds in CA), being beholden to & inevitably supporting the wonderful companies that are John Deere and Monsanto, having to use proprietary seeds and IP for such a basic human need, etc.? Some of our largest problems on the planet trace back to modern industrial farming.
To be clear, I love and respect farmers a ton, my comment isn't about them at all. They're amazing and hardworking and anybody in the the business would be dealing with the same problems. I'm just talking about the purity of the business itself that you're talking about. The idea that the job is somehow so morally pure compared to all the other jobs baffles me. Your average local job (waiter, cashier, postal delivery worker, janitor, etc.) would seem to have a much more direct positive and impact on people's happiness and much less of an opportunity to take advantage of other beings, as you put it.
That is all much the same as the prices being set in Chicago: Someone else has made the decision. While someone else no doubt feels the "ick", I am but the customer who is being taken advantage of. (Well, except in the case of Monsanto — they closed up shop years ago)
> Your average local job (waiter...
It seems you, deep down, even understand that. Comparing farming to being a waiter as opposed to the restaurant owner, I feel, is a pretty good portrayal of the difference and it is telling that you chose that point of comparison. Technically farming is like owning the restaurant, but in practice, because everything is laid out for you and decisions are made elsewhere, it feels more like being the waiter. You are layers removed from the "ick".
There’s a certain satisfaction there that most people don’t get out of their ‘cog somewhere in the middle of a machine’ jobs.
To be blunt: I don't buy this... at all. Farmers have (in theory, and to some extent in practice) choice in (a) what they grow, (b) whether to grow organic/GMO/etc., (c) what pesticides/fertilizers/etc. they use and how much, (d) how they treat any animals they have, (e) whom they sell to... I could go on. Of course competition and supply and demand constrain what they can do, but that's true for most if not all business owners, including restaurant owners.
Waiters are not* like this... at all. They have -- by definition of their jobs -- zero control over the dishes, the recipe, the cooking, what is ordered, whom to serve, etc.
Therefore the idea that "technically" the farmer is like the restaurant owner but "in practice" like the waiter therefore makes no sense to me. They are (extremely) more similar to the restaurant owner in basically every dimension, not just "theoretically".
Depending on one's values though I'd see something similar in some modern conventional farming where the land is being degraded, but there's still the righteousness that you are feeding people so it's justified.
There are ways to farm and some other kinds of businesses too that are win win for everyone involved. They're generally not the most short term profitable. Or even in-one-lifetime profitable.
I therefore wondered if it refers to this, a disease of corn...or if it was just a coincidental use of the word.
https://www.nature.com/articles/srep43818.pdf?error=cookies_...
I had a coworker once who lives in this region and owns some amount of farmland in a similar situation. He could have sold it and moved his family to <insert modest paradise here, in his case Florida> at any point; even now I think it would be easily done, if not as easy as in the past. But of course he still lives there, immiserating himself to keep the farm barely viable and working a second job to provide a livable salary.
Why? Because selling it would offend his dead father’s pride.
You have tons of businesses that are viable (produce enough money to support a family) as long as you never load it with debt; because they do NOT produce enough to support a family and the debt load that would come from buying it.
So they're unsaleable.
I've been thinking about this situation as "the bakery trap". The labor dimension here is that the best possible career move for the person you've spent the past n years training is to immediately leave once they've mastered your hot-cross bun recipe.
Jokes on them because it's even less of a business now.
Eventually I met the father, and he was big into the farm life. running a small but industrial farm. I still didn't understand, he mentioned a love of feeding people, why is he doing this and why is he putting his family through this, my girlfriend was translating the things he said but I didn't get it, so I assumed language barrier. They did seem to be respected in the town though by all the shopkeepers. But given the options, they were quite liquid and wealthy, it seemed contrived.
Then I met the grandfather, now, I liked that guy. The grandfather had a diversified portfolio, golf ranges, restaurants, farms, different siblings and children running them all. There was no "I just love feeding people" bullshit, just revenue streams and property. The farmer son just got the short straw and had to adopt that persona.
Deluding yourself into believing in what you do is easier than getting up every morning knowing it's bullshit.
Certain areas of government, debt collection companies, insurance industry, there are literally high rises full of people who live that existence every single day.
they might if you count opportunity cost (ok not $5M but you get my point)
When you buy land to develop, you have to pony up cash for it. I have never heard of a lender lending without a cash flow producing asset as collateral.
https://www.farmcreditil.com/Products/farm-loans
There's even government grants and loans to help:
https://www.fsa.usda.gov/resources/farm-loan-programs/farm-o...
Edit - we're on HN. If you'd ever tried to get a business loan you'd know it's near impossible for a new business without 100% collateral, which is why the entire venture capital business, and HN, even exists...
>Farm Ownership Loans offer up to 100 percent financing and are a valuable resource to help farmers and ranchers purchase or enlarge family farms, improve and expand current operations, increase agricultural productivity, and assist with land tenure to save farmland for future generations.
What is "assist with land tenure to save farmland for future generations"? Is that speculating for future price increase?
Banks will let you finance any land if you have a way to pay for it. They'll let you mortgage some plot of land in the middle of nowhere if you have the income to pay for it.
A farm is income. A future farm is a business plan. But if you want to speculate on land from the city and work an office job, yeah, they'll give you a loan for that too.
> What is "assist with land tenure to save farmland for future generations"? Is that speculating for future price increase?
Pretty much yeah.
Doesn't seem accurate. See:
Land not occupied by some money making asset also being financed or used as collateral in the deal cannot be financed at rates that are not the lending equivalent of a "we really don't want this job so we're bidding high".
Since you're an expert link poster why don't you cherry pick us all up some of those underwriting guidelines you cite?
I look forward to learning about ag specific loan products.
Guidelines are openly available at Fannie Mae, Freddie Mac, and USDA websites (unless there are specific overlays a bank is using, which is typically proprietary).
I love government subsidies through implicit and explicit loan guarantees. It’s the reason a 30 year mortgage exists. It’s the reason one can default on an FHA mortgage with almost no consequences (while being almost impossible to default on student loan debt).
To your point this is “subsidized by the rest of us,” the bottom 50% of American earners only pay 2.3% of total federal income tax collected, with the top 50% paying the rest. The poor folks are not on the hook for subsidies when they come out of general federal gov revenue (FHA loans charge an upfront and monthly mortgage insurance premium, and there are similar costs for USDA and VA loans but lesser so; we can consider those costs “cost recovery” for the purpose of evaluating self funded vs subsidies via transfer from the general fund).
https://taxfoundation.org/data/all/federal/latest-federal-in...
Like student loans?
>It’s the reason a 30 year mortgage exists.
Which is a large part of the reason houses cost what they do.
>the bottom 50% of American earners only pay 2.3% of total federal income tax collected,
"Well the poors aren't paying for it, you are" isn't the endorsement you think it is. And the poors still get kicked in the dick by spending driven inflation same as the rest of us anyway.
I have no experience with farmland, but for other purposes such as building hotels/retail/etc, you can't just get a loan for the land, you buy the land with cash and then get a construction loan to start development. I assumed you would have to at least need to have a plan to operate a farm to get a loan.
https://www.fsa.usda.gov/resources/farm-loan-programs/farm-o...
100% financing government backed:
> Farm Ownership Loans offer up to 100 percent financing and are a valuable resource to help farmers and ranchers purchase or enlarge family farms, improve and expand current operations, increase agricultural productivity, and assist with land tenure to save farmland for future generations. With a maximum loan amount of $600,000 ($300,150 for Beginning Farmer Down Payment), all FSA Direct Farm Ownership Loans are financed and serviced by the Agency through local Farm Loan Officers and Farm Loan Managers. The funding comes from Congressional appropriations as part of the USDA budget.
As long as your intent was in good faith at time of origination, you’ve met the burden.
Yeah, this is the pertinent detail. The whole point is putting down only a fraction of the amount.
When you calculate the rate of return on a financed property, the rate of return is versus the capital you put down, not the value of what you financed. Plus accruing equity in the property is part of the return.
If you put down $1.25 million and you get a $5 million property paid off after 20 years, that's double the rate of return on your bonds.
But opportunity cost is a thing. No land equals no farm and no opportunity for that return.
If not farming, what kind of job can the would-be farmer get and how would they accrue enough capital for their return on T-bills + income to equal their farming income paying off the land? Also my calculations didn't consider that the land value would rise, which it almost assuredly would.
What really happens is as you pay off equity on your land and equipment, you leverage that into buying more land and more equipment.
Successful restaurateurs buy more restaurants, successful tech startups hire more devs and buy more servers, successful farmers buy more land.
Actual (successful) business activity yields more than investments, which is why they reinvest in themselves over stock markets.
Let me tell you about farming... this isn't true.
Land value can decrease in real terms at the same time inflation is happening, sure. But it isn’t revalued by inflation in the way that a contract denominated in the inflationary currency is.
Can you explain more about what you mean?
You buy land at time t for price x. You sell land at time t+1 for price y. If (y-x)/x is is less than the same calculation for whatever other asset you would have bought (I would use sp500), then you lost money.
Land in the desert with zero economic value (think Slab City) probably does not keep up with inflation.
There are millions of Americans who own what would otherwise be "developable and valued as such" land that became basically worthless with the state passage of various environmental laws (particularly wetlands setback stuff) that make the juice not worth the squeeze except if the location were to become "major urban area" level dense while the municipalities passed zoning laws making it all but impossible for that to ever happen.
I guess when you think about it it's not that the land is less valuable. It's that there's no value left after doing what you'd need (endless engineering and construction hoops, lawyers, court, etc) to extract the value without the government just unilaterally deciding you no longer own the land and backing that up with violence.
Illinois state is in a bad financial position, they can't inflate their way out of it. Financial assets are easier to move than land if things get bad.
Well, it is ultimately a real estate business. The "hundred grand" in profit is really there only to support the mortgage payments — meaning that's what other farmers are counting on, so they're going to drive the prices down to that point. It is like a tech startup. You are counting on the assets increasing in value when you exit. That is where the profit will eventually come from, hopefully. It is not a business for everyone, but I like it.
> Many of the buyers keep growing their farms because it's a status symbol.
And because the fun parts of the job end too quickly when you don't have enough acres. I'd at least like to double my acreage. That is where I think I'd no longer be in a position of "That's it? I want to keep going!" and instead "That was fun, but I think I've had enough."
That said, the machines keeps getting bigger, whether the farmer likes it or not, so perhaps in that future I'll need even more land to satisfy the pangs.
I'm glad there are lots of types of people!
It has in the past. I looked at a $1M (~$1.5M in today's dollars) farm 20 years ago. Couldn't figure out how to make it work at the time, sadly. Frankly, it seemed like complete insanity when I got into the numbers. But, today it would sell for ~$6-8M. About the same gains as the stock market over the same period, granted, but it's way easier to convince someone to loan you money for land than it is to buy stocks.
There may be no reason to think that will continue to happen into the future, but many are willing to place that bet.
Then when they want to cash it in, they rezone it to commercial or residential and build on it.
can you elaborate on this perception?
At least when I still farmed that's what it was. I answered to myself, not to customers or clients.
And there are more outside of the commodities space
Well, thanks for pointing out what may be a common perspective amongst farmers, I think I prefer other businesses without the ick of running a farm
It’s a no brainer if you have a couple thousand dollars to spare for an estate lawyer to do some estate planning and spare your heirs probate court.
Plus in the states and wealth levels that many people on this website have, it is also a no brainer to save on taxes.
What I keep hearing from experienced estate attorneys is that California probate court is onerous and worth a lot of effort to avoid, but other state's have reasonable probate; it might still be worth it to avoid probate, but it's not such a big deal. OTOH, dealing with assets in a revocable trust can be a PITA while you're still alive and may not give much benefit while you're living either. If you're not in California, it's worth taking stock of the situation before you use California biased advice.
Having an estate in trust may not actually save on taxes either. Yes, you'll avoid probate fees in California, which is significant. But your estate will still pay estate tax. Otherwise, if an irrevocable trust holds the assets, it pays the taxes, and trusts have very abbreviated brackets; your heirs might well pay less income tax holding the property themselves.
When your heirs/beneficiaries die and their heirs become the new beneficiary, that's not subject to estate tax, which is great, but as a result it doesn't get a step up in basis. If the trust is large relative to the estate tax exemption, it's beneficial to not pay estate tax; if not, it's more beneficial to get a step up in basis.
Certainly, in some situations, trusts are more tax efficient, but you have to actually look at your situation to see. Default everyone should have a trust assumptions add a lot of senseless confusion and delay to the people who don't actually get a benefit from it. There are asset protection benefits from trusts as well, and it's reasonable to consider those depending on the situation as well.
Holding a farm in a trust or llc makes a lot of sense to me, because it makes it easier to split ownership without dividing the farm.
IANAL but to be clear, I'm pretty sure that CA does not have an estate tax. And the federal estate tax limit was just reaffirmed (BBB) at the prior threshold.
The amount of land owned by "out of state" owners may help answer this question but they don't give a number for that either. (A local farmer could also register their LLC out of state though I'm not sure whether that's beneficial or not.)
(I'm not a member of any guilds)
A limited company owning the "land" which is then leased to the "farm" business that works it.
Possibly a "group" parent company is owned by the actual farmer.
I'm sure there will be good tax and legal protection reasons to structure farms in this way, not forgetting various government schemes which bring in revenue via grants and tax breaks.
Edit: my (extended) family has a farm, and they cultivate X0,000 acres every year, though they own far less. They do plant a larger area than most for their community, but they’re not planting 20x their neighbors.
So I guess it would depend on the automation level of the kind of crops you’re planting.
It's small in that you can't support a family farming 500 acres of corn/beans. It's big in that buying 500 acres would cost $5M - $10M, that's real money!
It's somewhere between an extra job and a hobby. It's just touch for planting / harvest season -- lots of nights / weekends / day job PTO along with getting help from relatives.
Reminds me of when, a few years ago, the outrage headlines were "half of all US corporations didn't pay income tax last year!"
When one dug into it, it was because half the corporations didn't make any money that year.
There is no type of farming that beats t-bills today if you buy the land today. There is a saying in farming: "Buying farmland never makes sense the day you buy it." The land you bought 50 years ago is looking pretty damn good now, though. The economic bet farmers not cashing out (or buying in) are making is that trend will continue.
My mom's relatives have a long horn "farm" complying with the minimum requirements to claim various tax exemptions. :sigh: Their family business is aviation real estate, services, equipment, and aircraft.
I can walk to where sorghum and field corn is grown here in hill country because that's the major trade in these parts, apart from selling land for new housing developments.
Cute it's a status symbol. But that just screams market inefficiency ergo everyone worse off.
Vertical integration can have benefits, but it isn't necessary and has drawbacks. Even when vertically integrated, regulations are often written under the assumption that everything is leased, not owned, so compliance is easier if you own a company that owns an asset, instead of owning that asset directly.
For example, if two people carpool in a car that one of them owns, instead of hiring a taxi, they'll usually split the costs of the fuel and the wear on the car. On the other hand, if they were flying in a small airplane owned by one of them, it's illegal to split the costs of wear on the airplane, unless its a rental or air taxi. Because of this, and other similar effects of FAA regulations, many small airplane owners own a company that owns the airplane, instead of owning it outright, and rent the airplane from themselves, whenever they use it.
I'm sure you're right about the compliance thing in general, but I don't get your example.
Actually, even if you are a licensed commercial pilot, there are still strict rules around payment. You can be paid for your skill as a pilot, but you cannot, e.g. charge for giving rides in your personal airplane.
While that sounds like a bad rule when I first read it, I smell Chesterton's fence here. I'd like to understand why that regulation was written before getting rid of it.
You can take your friend for a spin in your plane if you want, or go screw around and kill yourself, but you cannot "hold out" your operation as an air taxi or airline to the general public, and you can't make money off of it in any situation.
A commercial pilot has to undergo much more training in operating an aircraft safely. This means the FAA allows them to get paid to be a pilot - they could be hired to fly someone around in that person's plane. But the commercial license does not really train them in running a safe airline, so the FAA does not allow them to use their own plane to run an airline.
EDIT: To word it differently, the opportunity to get paid increases the likelihood that someone will push limits or take unsafe risks. If you aren't under pressure to make your paycheck, you're less likely to take your passengers into marginal weather. (One of the most dangerous occupations in aviation is medivac/aviation EMS. There, the pressure isn't generally monetary but moral: you want to help a sick patient, so you take more risks.)
Critical care (but not flight) paramedic (though I have transferred patients hundreds of times to them):
When we request Heli EMS tht providers are given patient details, but the pilot is strictly given "pickup" and "destination" (they used to be given patient weight, and may still be depending on location and size of helo, but generally not) - the goal being "evaluate safety based on weather conditions only, not a patient condition that tugs the heart strings".
A grandfather-in-law owned his own small business (a civil engineering firm), and had a plane that he flew to get to meetings/job sites across the Midwest. He could fly company employees just fine- and the company could reimburse him for the flight expense, and since it was not for the public that was fine. He could fly his family or friends on his own dime just fine. But if a family member or friend not working for the company tried to compensate him for the costs, then it is a question of "is his company actually an unlicensed airline?" and now we're getting into territory where it gets complicated. The FAA heavily regulates airlines, which is a major reason they are so safe. But there has to be a lower bound on what gets regulated, and avoiding that is what I think that GP is referencing.
It's simple. Getting a commercial pilot license is a much more involved process than getting a private pilot license.
A private pilot needs just around 30 hours of flight time to get a license. A commercial pilot needs at least 250 hours and a medical certificate that needs to be renewed periodically.
That's true, but for anything other than the most podunk regional airline, you're going to need 1,500 PIC (pilot-in-command) hours before the airline will even consider you (although I believe I heard due to pilot shortages some airlines were willing to consider 1,000 hours).
I understood that. But the post I quoted said that you couldn't accept payment even if you were a licensed commercial pilot, if you owned the plane. I'd expect the 250 hours and the medical certificate to be enough to make it safe for you to accept payment, and apparently the regulators who formulated the rule don't think that's the case. I was saying that I'd like to understand why they don't think that's the case before I'd want to support any relief on that rule.
You absolutely can. But your _aircraft_ also has to be maintained to commercial standards (likely FAR 135).
Basically, you need to operate an airline to carry paying passengers.
Historically, laws were written by the legislative branch (congress), enforced by the executive branch (the office of the president), and overseen by the judicial branch (federal courts). When oversight works, all three have to agree for an enforcement action to take place.
In somewhat recent history, congress has been passing regulations much less, instead passing authorizations for the executive branch to write their own regulations. On top of this, the judicial branch had, until last year, allowed executive organizations to use their own judges, without juries, and follow their own interpretation of laws and regulations, when it conflicted with a literal interpretation. See https://en.wikipedia.org/wiki/SEC_v._Jarkesy and https://en.wikipedia.org/wiki/Loper_Bright_Enterprises_v._Ra... for the recent rulings overturning those precedents.
The effects of those last two cases are still working their way through the relevant bureaucracies, so until then, the FAA will keep with their current interpretation of gaining experience as a form of commercial income (https://www.faa.gov/media/15611) and having a reputation as form of advertising (https://www.faa.gov/documentLibrary/media/Advisory_Circular/...).
Even then, there's a hole in the system that especially impacts overly broad definitions of commercial activity, which as far as I'm aware, no other executive organization has taken anywhere close to the extreme of the FAA.
That hole is that even with the precedent of the recent supreme court rulings, they only take effect when something goes to the courts. With real commercial activity, this happens regularly and often preemptively, because the costs and resources needed to take something to court are easily recovered by the extra income or savings of a ruling that follows proper checks and balances.
On the other hand, there is no incentive to spend the money and resources needed to regain rights for non-commercial activities, like carpooling (or airplanepooling) where no one is earning anything.
Government should focus on making it easier for new companies to compete as that is what generally yields better and/or less expensive products.
Sounds nice but it's not true in the US. A majority (60%) of US land in farms is owner-operated.[1] US homeownership is 65% meaning most housing units are owner-occupied.[2] And 60% of North American airplanes are owner-operated not leased.[3]
[1]https://www.ers.usda.gov/topics/farm-economy/land-use-land-v... [2]https://www.advisorperspectives.com/dshort/updates/2025/07/2... [3]https://www.iata.org/en/iata-repository/publications/economi...
I guess, for me, most would have to be something north of 80% because it just doesn't feel right to use it below that. 65% would be majority, obviously, maybe significant majority or some such.
Anyone else feel this way?
Edit: if anyone else reads this, I totally shouldn't have even brought this up. Downvote away, but as other replies have pointed out I missed the definition of "most" when you're comparing numbers against each other.
Most people who voted for US President in 2020, voted for Joseph Robinette Biden, Jr.
The majority of people who voted for US President in 2020, voted for Joseph Robinette Biden, Jr.
(I'm a native speaker, but there might be some regional differences here.)
Regardless, the majority is also the plurality so using most when it is over 50% would also be acceptable.
>If there are 3 people and 2 of them have $5 each and the third has $6 it would be correct to say the third has the most money despite not having 50% + 1.
This is not an applicable example, as most is not being used to refer to the proportion of money. It is using a different definition of most, which is the top rank when ranking things by quantity.
https://dictionary.cambridge.org/us/dictionary/english/most
No, "most" does not mean "80%" or any other made up number.
I prefer Merriam Webster, which is far more clear. Definition 2 (defn 1 does not apply in this context): https://www.merriam-webster.com/dictionary/most
There may be a minority government elected, with 40% of the seats, and 30%, 20%, 10% to other parties.
The 40% party will be described as winning the most seats.
Anyway, appreciate you reminding me (and I deserved to feel dumb so also making me feel a bit dumb about it).
It's a different definition than defn 2 (m-w), which is what is used when saying "Most farms are not owned by farmers."
"The 40% party won the most seats" carries a different meaning than "The 40% party won most seats"
Pure "most" is implicitly that option versus all the rest.
Maybe you should read the link I provided. It would likely clear up a lot of misconceptions for you.
I’d bet it’s less than 60%
You need ~$1M worth of equipment to farm 80 acres (~$1M worth of land), but that same equipment can basically farm 800 acres (~10M worth of land). An equipment issue can destroy a years worth of work with 800 acres (e.g. frost damage from delays), but with 8000 acres you can have spares / avoid the loss with some overtime.
Fertilizer and pesticides aren't neatly contained. If you farm different crops than your neighbors, overspray can kill your yield (e.g. weeds spray for corn kills soybeans). Laws around who can grow/spray what and being big helps make that better
All new? That seems way too low. You'd struggle to get into a combine alone.
Used? That seems way too high. I doubt I'd get any more than $300k for my equipment (and that's more than I paid) if I were to sell it today, and it's pretty nice equipment compared to what I see a lot of farmers using.
> 80 acres (~$1M worth of land)
We always wonder why so cheap? The 18 acres for sale down the road from me wants just about $1M (I expect that will be a hard sell, to be fair). The 130 acres further down the road wants nearly $4M (quite realistic; comparable parcels have sold for more). If you could pick up 80 acres in these parts for $1M, you just won the lottery. And, to be clear, it's not like on the edge of a city or something where other interests are driving up the price. It's just farmland. The yields are respectable, but not quite like Illinois will produce.
You must have better land than we do. Land by me goes for around 14K/ acre. The bigger plots or better land goes higher.
It's decent enough, but hardly the best ever known. 200-220bu corn and 50-60bu soybeans would be pretty typical for good ground. Whereas, as I understand it, that is merely average ground in Illinois?
But the farmers are really hungry. Case in point: When I was a kid there were eight adjacent farms, including where I grew up, that all had farmers living on them. Of their kids (my generation), there are now 12 of us trying to farm in the same area. That's a 50% increase! As you can imagine, the competition is fierce.
I work for John Deere, though I don't speak for the company. All tractors are built to order, which means when someone buys a new tractor the dealer has several months to sell the trade-in. When the new tractor arrives from the factory the truck unloads the new one, and loads the trade in to take to someone else. A good dealer will have a list of farmers and what equipment they all have so they can put this deal together. As a result the only tractors a dealer has are service loaners (which are sometimes rented), which makes all the accountants happy.
You'd think, but you'd be surprised. In fact, one of the families I rent land from (aging couple who was looking to work less land) is still working around 50 of their acres themselves and they got a couple of new tractors recently.
> They are likely hiring someone else with a combine to harvest their fields
They even combine the crop themselves. But, to be fair, the combine is pretty old (IH 1420).
Don't forget tax deductions. There is a reason the week between Christmas and New Year is a big on for tractor sales - your accountant suggests you want to get the down payment out now and off your books. As an accountant to explain it (I don't fully understand this)
A rational economic actor would sell the land. 80 acres would fetch around $2M around here pretty easily. You're not getting $2M of pure economic value of 80 acres.
But what are you going to supplant the enjoyment of being out on the farm with? No amount of money can buy a suitable replacement.
This isn't true:
https://www.faa.gov/documentLibrary/media/Advisory_Circular/...
That AC and the regulations cited in it couldn't be clearer-- if you and the pilot are both going to $destination for $reasons, you and the pilot can definitely split the cost of the fuel.
Moreover, this is perfectly analogous to the carpooling example as you stated it-- two people both having a stated purpose traveling to a destination, both sharing the cost of gas/wear.
There of course could be ways to carpool where the passengers pay the total cost of the driver's gas/wear/etc. You can't do that in your airplane. But again, I think the reasons for this are glaringly obvious-- keep silicon valley from attempting to create an unregulated taxi service in the sky. (In fact, IIRC there was someone who tried over a decade ago-- perhaps these laws are a response to that?)
> Because of this, and other similar effects of FAA regulations, many small airplane owners own a company that owns the airplane, instead of owning it outright, and rent the airplane from themselves, whenever they use it.
I mean, the pilots I know who do that are either a) multiple people owning a single plane, or b) single owner literally running a rental taxi service. Who isn't covered by those two categories?
Also, I think it's worth mentioning that the advisory circulars, legal interpretations, and other letters the FAA writes aren't regulations, and it takes a ruling going to a federal court, not an FAA panel or tribunal, to set a precedent for what is and isn't legal. As far as I understand, this has never happened with FAR 61.113, which is a bit self contradictory and the FAA's overly broad definition of compensation where "the building up of flight time may be compensatory in nature if the pilot does not have to pay the costs of operating the aircraft" (https://www.faa.gov/media/15611) is extremely unlikely to ever hold up to a jury.
(the general upwards trajectory of real estate makes it an investment even when it does not generate any income, do much better than owning a boat!)
So most homes are owned by the occupant. I suppose if you want to be pedantic and say mortgaged homes are owned by the bank, sure I guess?
But I think homes should not be included in your list here.
Well, pedantically, you own the home, but the bank has a lien, and contractual rights in the event of default. But the title is in your name.
Contrast to a vehicle, where the lender is the Legal Owner on registration docs, and retains title (in all but two states, I believe).
I think the difference is for real estate, title documents and liens are recorded, whereas for vehicles, titles are registered, and possession of the physical title is almost enough to change the registration; it makes sense for the lender to physically hold the title until the loan is satisfied, in order to prevent a sale without paying back the loan.
I would also push back on the notion that owner-operators are in a better position. It's more accurate to say that farmers who have assets of any kind are better off than those who don't have assets. As an example, generations back in my family we owned a lot of farmland. There were some bad investments made in the farming operation and we almost lost it all. This was in the early 1980s for those who are familiar.
If my grandfather had sold all of his land and equipment in the late 1970s and invested it in the recently-started Vanguard group, rather than re-investing in the farming operation, then my family would be wealthy. Now expecting a farmer to know about index investing and to bet on it when it was just starting is unreasonable. But it's a good lesson in diversification.
When people lionize farming owner-operators, they discount the risk that owner is taking by having so many assets concentrated in one operation. Now farmers do know about investing and diversification, and some do make the rational decision to cash out. Many also don't, for various reasons.
But it's not totally fair to expect farmers to behave differently than other asset owners because farming is seen romantically or in terms of national security.
This is a different argument than one which would decry the position of tenant farmers. Obviously being a tenant farmer owning nothing but equipment is harder than being a farmer who has $5 million invested somewhere else and rents the land he farms.
Obviously there are recessions and having your own vegetable farm and place to live is nice... but most of the time there isn't a cataclysmic recession, so you're leaving money on the table. Meanwhile, it's pretty easy to have a bad year farming. Weather. Pests. Having a lot of assets doesn't help you when they're not liquid and plants won't grow for a year.
Of course, the irony is that now we romanticize industry too.
It set up the critical vulnerability that we have today, that in states where the votes are close at the state level, switching just a handful of votes completely moves the votes in the electoral college. This will be a continuing temptation, and a weakness of the us system. The 200 or 300k votes in swing states that had Biden beating Trump and then Trump beating Harris this time is not a great thing in democracy.
So this vulnerability makes it a potential attraction to steal votes. There was the notorious recorded phone call when Trump called up the Secretary of State in Georgia and said he only needed 11,700 votes, please give them to him.
They explicitly negotiated the electoral college to protect their ability to not be overwhelmed by more populous states, and forever maintain their voice in the union. It is working exactly as intended, and is essentially a contract we are all a party to.
We don't let one party unilaterally change other contracts, why should we here? It seems you'd have to be a very big hypocrite to support such a thing. You should honour the deal or find a way to renegotiate it that makes everyone happy, not just yourself.
For another, we're not bound to contracts between people who are long dead.
For another, the constitution (little c, not the actual document) is not a literal contract. That's a methaphor.
Finally: Why do you, as a person, want a system where land can vote? Or are you a parcel of land pretending to be a person?
I think the founders would be pretty surprised to see the vast majority of electoral votes being determined all-or-nothing by the popular vote of the citizens of the state. If that was how they intended it to work, you might think they would've set it up that way in the first place.
To the electorate at large.
Direct election of senators has been way worse for the country. You need something that represents the states as entities.
Once you start thinking about that, a lot of the mystery or 'inefficiency' of farming in the USA makes more sense. For example, the subsidies to grow corn and soy but not kale and squash or whatever was in the article- growing kale and squash isn't a strategic priority.
Also, farming is mom and pop highly optimized operation. Those two don’t need to be separate things. Once you understand that running a farm can be hundreds of thousands of dollars if not millions, you can understand the disconnect.
BigAg farms? You're absolutely right.
And yet, farmers are a vocal and critical political bloc in every other EU country, too.
Farming is just important. Not as much because it employs a large portion of the population, but because it keeps a large portion of the population alive. It is the original industry that's "too big to fail" - if you let it, you get famine.
I inherited farm land from my grandfather. I am very much not a farmer, I do not want to live in Southern Illinois, but I don’t want to give up the land, so I rent the land to a farmer with adjacent property.
I realize that’s not really the point of this article—this is more about huge firms buying up non-trivial amounts of land.
https://www.osc.ny.gov/files/reports/pdf/profile-of-agricult...
It's interesting how little of NY state is farmland (21.6%).
"When the extended family of the farmer is taken into consideration, 94.6 percent of New York farms are family-owned."
At this point I think it's basically impossible to actually lose money on a farm as long as it's family/individual owner-operator.
It's also why NY state cropland is among the most expensive in the country. Once you get it, the value will only ever go up regardless of crop yield in any given year.
A good deal of the farmland in the NY county where I live, Tompkins County, has gone back to forest since the beginning of the 20th century (although not to the extent in, say, Massachusetts). This suggests to me that just holding farmland here cannot be much of a moneymaker, since if it were we'd be seeing this land brought back.
https://www.cabidigitallibrary.org/doi/pdf/10.5555/200430940...
https://en.wikipedia.org/wiki/Orville_Freeman https://ers.usda.gov/sites/default/files/_laserfiche/publica...
“They want that land to be clean corn and soybeans,” Bishop said. Before the restrictions, his father was growing organic corn and soybeans on part of the field and letting Bishop grow vegetables on the rest.
I've seen this mentioned elsewhere, but the idea that you'd force someone else to create a mono-crop desert, not even out of a sense of efficiency, but _just because it looks right_, is just so frustrating.
it's not a new phenomenon, most people who bought the farm do not follow through and till that land...
ok ok, i'll stop. to people who are not native speakers of US English, "bought the farm" is a euphemism for dying https://en.wiktionary.org/wiki/buy_the_farm#English
from that link: "Etymology: Not known with certainty. Two long-held hypotheses are as follows: One describes combat soldiers wistfully wishing to go back home, buy a farm, and live peacefully there; later, after they had been killed in combat, their fellow soldiers would say that they had bought the farm (compare the established metaphor pattern of having gone to that big [whatever sort of nice place] in the sky). Another links the phrase to the idea that governments compensate farmers whose land is damaged by a military aircraft crash; a deceased pilot was thus said to have bought the farm, and the term eventually entered wider use."
> More than 22% of the farmland in 12 Illinois counties with the highest rents is owned by a business entity, defined as an operation with an LLC, Inc, LTD, Co., Corp, LP or LLP tag. Sangamon and Edgar counties were included in this analysis because historical data was not needed.
The TL;DR is that Illinois is one of the few states where there aren't restrictions on farmland owners, and even there it's a small (if growing) problem.
I think this is one of those problems that should theoretically be self-limiting. The economics of a farming family owning their land is too strong - just from the amount of tax breaks and subsidies available. Put another way, the land in a farmer's hands is worth more than in a corporation's.
I think the real risk comes from large farm landholders who want to cash out of their farm but don't have an heir or successor lined up. Farmers are getting old and their kids more often than not don't want to run the family farm anymore and there simply aren't going to be any other buyers.
We sold it to some outside group. Apparently the best way to sell land today is an online action. You announce it ahead of time, there is a minimal amount to start bidding, and then like an ad auction, there is a minimal increment to go up by, fixed time limit of like a week to bid.
I was really sad that it left the family. The sale price of the midwest farm land ended up about $10k an acre for cropland. The amount of money that renting brought in didn't seem like it would be enough for any young person to actually buy land at current prices. I am sure they'd have a lot of tax deductions but can they get a million dollar loan? I expect there will be houses put on the land eventually. I had an idea for how to keep it suitable for future farmland, which was to put solar power on it with a 20 year contract with a local power company (with everything removed after).
Or you marry someone who will inherit land - this is often the best way in.
Again, however, if he is genuine: I genuinely wish him the best luck taking on his matched opponents.
I also don't live in the US.
In Judaeo-Christian scriptures, the prohibitions against anyone acquiring ownership of land go all the way back to the Torah.
Though like pretty much every religious prohibition on behaviors which the well-to-do want to do - those commandments fall under the "we never talk about that part" rule.
EDIT:
- Please note my "against anyone ACQUIRING ownership of" phrasing, above.
- Details are in Leviticus, Chapter 25
There is actually some interesting scholarly work that shows such a system would work perfectly fine within a modern capitalist system - it would reduce inequality and neatly lines up with natural debt cycles.
but you know, that interferes with commerce too much. (also part of the reason for huge amounts of anti-Semitism from about 1100-now )
they should have noted _what percentage_ of farmland is owned by out-of-state businesses; otherwise the 250% increase isn't meaningful
I think you could definitely move the subsidies around, but subsidizing food is a basic good idea for any state really.
The risk is going back to the time where we left corn in piles to rot. That's not harmful in any kind of immediate sense, but losing that energy to waste heat instead of converting it back into usable energy is less than ideal.
> and you could definitely cut back on corn
It's not that you try to grow too much corn, but its yield can be pretty unpredictable. Last year, with favourable weather, yields around here were nearly 100 bushels per acre higher than pre-harvest estimates! That is a hell of a lot of extra product that nobody ever expected before the combines started rolling.
And if you plan for those freak years every year, you're going to end up short more often than not. There is a lot of guesswork involved. That is what ethanol was originally intended to be: A way to buffer that guesswork.
> in general and promote some other stuff
Like what?
1. The consumer dictates what you grow. The consumer loves corn (mostly because it turns into meat). You'd have to compel the consumer to eat something else, and that is going to be one hell of an uphill battle. Many organizations have been trying to get people away from meat for decades and meat consumption is only going up. Meat doesn't necessarily have to come from corn, granted, but other options are more expensive. The consumer isn't going to pay more for meat either.
2. Corn equipment is compatible with other human foods (beans, wheat, etc.) that are also being grown in the crop rotation. If you expect a corn/bean/wheat farmer to start growing carrots in place of corn, good luck. They'd never be able to afford the capital expenditure to add carrot equipment to their lineup.
No, I don't love biofuels either. but it's not entirely a bad idea.
Need more legal immigration, and paying Brazil, etc. not to farm there. Better to do that than subsidize farmers.
- Use arable land where it exists, not just where the cheapest labor is
- Don't do deforestation or other such things
I would like policies that directly address this:
- Legal immigration fairly moves the people the arible land, rather than moving the farming to the cheap people. The goal would be in 200 years there is enough economic development and immigration that there is no longer global scale labor arbitrage.
- Paying to protect the land we directly care about directly protects that land, and removes the incentive to farm there after all. (If you farm there, you loose the preservation rent.)
Farmers in brazil are notoriously far-right-wing, just like else where, and so paying the gov to not farm has other return-to-center-and-sanity benefits too.
Our current system produces a successful harvest (and surplus) for us every year, so I'm gonna stick with that.
Farm subsidies are both the single most important national security policy a nation can have, and an incredibly inexpensive yet extremely effective insurance policy.
I thought the current thing was "shrinkflation"?
Isn’t this the historical norm? Anyway, we don’t live in a communist utopia, so most people don’t own their workplace, farmers or not.